After years under the radar, Ennis School Board looks for way out
By Taylor Anderson

big sky weekly assistant editor

This is the second in a three-part series on
the Ennis and Big Sky School Districts
ENNIS—The Ennis School District has
been clouded in fervor over the past few
years, and it’s not due to its academics.
Several financial moves have put the
district under the public and legal spotlight, and the board of trustees is now
working toward remedying the issues.
But fixing the problems has been like
trying to run a marathon through
muddy water.
The school’s trustees were catapulted
into a frenzied firestorm after the
Teachers’ Retirement System ruled the
school’s superintendent, Doug Walsh,
along with the district, owe more than
$760,000 in improperly collected
retirement funds, according to TRS
executive director David Senn.

With the direct and indirect funding,
$6,275,819 (or 62 percent) of the $10
million project came from adult education and transportation.
County employees began questioning
the use of funds, and in summer 2010
Madison County Deputy Attorney
Chris McConnell asked the Montana
Office of Public Instruction to conduct
an audit on the school’s accounting.
In a letter from Aug. 16 of that year,
Montana OPI Deputy Superintendent
Dennis Parman told McConnell that
although the transfer of funds technically wasn’t illegal in the eyes of the
state, the trustees would be wise to plan
for a drastic increase in adult education
offerings.

was illegal, and transferring that much
money required a public vote. Bullock’s
decision—which holds the weight of
law—set the ground rules for Montana schools to follow, as the case was
unprecedented.
Separated by a mountain rage and
a private road yet part of the same
county, Big Sky’s Madison County
residents have been stirring because of
the money they’ve contributed to the
Ennis School System over the past four
decades.

Big Sky residents in districts 28 and 29
of Madison County have contributed
about 50 percent of the property taxes
collected annually due to the high price
of real estate
in those areas,
"The taxpayers absolutely
which include
should see a reduction
the resorts and
in school taxes this year
Yellowstone
because of the over
Club.

An opinion released in December 2011
by Attorney General Steve Bullock
declaring the school used more than
$9 million in improperly raised and
allocated funds to build a new school
further muddied the mess, and the
town has been split over how to take
the next step forward.

“We assume
the district’s
unorthodox
method of
funding the
taxation that has gone on.
project reflects The adult education fund is
the mutual
not the only fund that has
desire of the
been over taxed."
school district
and commu-Lisa Frye, Ennis School Board Trustee
nity to provide
significantly
expanded adult education opportunities in the community,” Parman wrote.

The two decisions highlighted only
some of the legal struggles the board
has faced in the past few years, and
February 2012 marked a potential peak
of problems before the trustees hope to
work at sifting through the issues and
coming to a long-lasting solution.

“If, in the future, the district does not
provide expanded adult education opportunities to the community in this
new facility proportional to the funding
the taxpayers have provided in support
of that effort, there will be an issue of
significant concern at that time.”

The town has been split, and the trustees are only beginning to see the full
spectrum of its financial woes before it
can work to right them in the eyes of
the TRS, the state and the Ennis community.

Parman said in an interview in March
that McConnell’s request had come
after the foundation had already been
poured on the now completed building.

Though money is the key issue in
most instances with the Ennis School
District, lack thereof isn’t. School
district mill increases allowed the annual budget to skyrocket from about $6
million in 2004 to close to $17 million
this year.
It wasn’t how much money the district
had accrued that lit the fire, but how it
chose to use it.
After building up funds from mills
raised over several years, the board
transferred the money into a fund
intended for building a new, and much
needed, grade school, thus skirting a
public vote.
The school used $4,225,819.10 from
non-voted adult education and transportation funds, on top of which they
transferred $2,050,000 into a flex fund
that was used for the building as well.

4 March 23, 2012

“It looked as bad as it was,” Parman
said. “They were raising over a million dollars and spending $25,000.
The question is why? Because they
were saving up money to build a new
school.”
Madison County Treasurer Shelly
Burke is said to have called for attention on the issue years in advance of the
new building. She wished to stay off
the record in speaking with the Big Sky
Weekly.
Superintendent Doug Walsh didn’t
return requests for comment for the
article.
In December 2011, Montana Attorney
General Steve Bullock stepped in and
released a preliminary opinion on the
school’s use of funds for the new building.
Bullock ruled that the money transferred from adult education and
transportation savings into an infrastructure account for the new building

explorebigsky.com

Those districts
have contributed 74 percent
of the Ennis
School District
budget since
2007.

owed has brought upon public scrutiny
and has ended up in multiple court
battles.
The first, from August 2010, was a
yearlong suit filed by Ennis resident
Dave Kelley against five trustees and
Walsh. He alleged Walsh deceived the
TRS, and also that the board violated
open meetings laws, unlawfully
used tax money and failed to provide public records for review. That
case was dismissed about a year
later by Judge Mike Salvagni.

Senn said Walsh would owe the
benefits he’s received since 2001
plus interest, and that the school
district owes employee and employer contributions that would
have been submitted, plus interest;
a total of more than $760,000.

If the board doesn’t agree to the independent audit, the commissioners have
said they would conduct an audit themselves, according to trustee Lisa Frye.

Just what’s next for Ennis has been a
Rubik’s cube issue in a town whose rift
is pitting its residents against each other
on how best to move forward.

Regardless of either audit’s outcome,
Parman with OPI says the findings
will only provide hindsight into the
murky issue, and any solution would
come from the trustees’ future decisions. There are several ways the
board could show the community
it’s working toward remediation.

Walsh announced in early February
that he would resign as School Superintendent effective June 30 of this year.
The trustees’ last meeting approved
having an attorney draft a separation
agreement with Walsh before his retirement.

“The taxpayers absolutely should
see a reduction in school taxes this
year because of the over taxation
that has gone on. The adult education fund is not the only fund that
has been over taxed,” Frye said.
The money some residents feel they’re

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There is an ongoing contested case
that TRS executive director David
Senn says will determine how the
group will recoup money paid to
Walsh over the span of a decade.

Senn couldn’t comment on that case
as it is ongoing, but said it could
stay in court if the two sides can’t
come to a mutual agreement.

Frye says there is a surplus that
could be used, but it’s in adult
education and other funds with
restricted use. Regardless, she says,
the taxpayers deserve a break.

Do you know which properties
will be the next to sell?

Then there’s the other elephant
in the room: Superintendent
Doug Walsh collected more than
$760,000 in retirement benefits
while receiving contract salaries
from Ennis.

The Ennis board of trustees voted after
press time whether it would heed the
county commissioners’ request of
conducting an independent audit of
the funds allocated over the past seven
years.

For example, Parman said the board
could choose to use any reserve
funds to pay back taxpayers in the
form of breaks from mills in future
fiscal years.

KULESZA

An audit will detail how and where the
board slipped up in its use of funds,
but it won’t lay out how to rectify its
blunders.
The AG’s opinion won’t likely result
in direct action against the board, but
rather lay the ground rules for Montana
schools to follow when transferring
funds.
Now, Ennis school board meetings are
well attended and tense, and the community is keeping more involved with
the trustees on a daily basis.
The storm didn’t sneak up overnight,
nor will it clear up quickly.
You can reach Taylor at
taylor@theoutlawpartners.com